Is the Goodman Group (ASX:GMG) Share Price a Buy After Its Q3 Data-Centre Update?

Goodman Group (ASX:GMG) gave investors a fresh look at its business on Tuesday, and the numbers were solid. The company is racing to build data centres for the AI boom, and its update showed that the pipeline is getting bigger. Yet the shares barely moved, falling as much as 4% during the day before recovering to close roughly flat. For a strong update, that is a lukewarm response worth understanding.

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Goodman’s Data-Centre Pipeline Keeps Getting Bigger

The headline was momentum. Goodman’s development “work in progress”, the value of projects it is actively building, is on track to reach about A$18 billion by June, up from A$14.5 billion in March. Data centres now make up 73% of that pipeline, showing how completely Goodman has shifted from warehouse landlord to AI infrastructure builder. Its total property portfolio sits at A$87.1 billion, and it reaffirmed its target of 9% earnings growth for the year.

The most telling number, though, is its “power bank”, now at 6.4 gigawatts. That may sound technical, but it simply means the electricity capacity Goodman Group has secured for future sites. Here is why it matters: in the AI race, the hard part is no longer land or tenants; it is power. Data centres are enormous electricity users, and grid connections are scarce. Locking up 6.4 gigawatts, in effect, locks up future growth, and that is Goodman’s real moat.

So Why Didn’t the Market Cheer?

If the update was this strong, why did the shares not rise? Two reasons.

First, expectations were already high. Goodman shares have climbed around 20% from their March lows, so a widely expected update gives buyers little new reason to pile in. Good news only lifts a stock when it beats what the market assumed.

Second, and more importantly, higher interest rates weigh on every property business. Goodman is spending heavily to build data centres, and a capital-hungry developer struggles when borrowing costs stay high. In our view, this is the more valid concern. The market wants to see the pipeline turn into funded, leased and completed projects, not just a bigger to-do list.

The Investor’s Takeaway for Goodman Group

Goodman Group is well placed for the AI infrastructure wave, and the update confirmed it. The issue is price. The stock trades at a premium, which means a lot of future growth is already built into it. That leaves little cushion if interest rates stay high or projects slip.

For long-term believers in AI infrastructure, Goodman Group remains a quality way to own the theme, and holders have no reason to sell. But new buyers are paying up for a story the market knows well, so patience may be rewarded. Investors chasing the same AI wave could also look at smaller ASX digital-infrastructure players, where valuations are far less stretched.